Demandware and the Future of Retail: A Post-IPO Snapshot

In the world of e-commerce, Amazon is going one way, and everyone else is going the other. Amazon has cornered the market on commodities and price-driven shopping, it seems, but what’s still up for grabs is the luxury market.

One of the more interesting tech companies in that sector is Demandware (NYSE: [[ticker:DWRE]]), the Burlington, MA-based maker of online shopping platforms for brands and retailers. The 250-person company started in 2004 and is led by CEO Tom Ebling. Since its IPO in March, Demandware’s stock has been trading above $25 (after opening at $16), and the company has a market capitalization of about $750 million.

Demandware is the latest in a crop of recently minted public tech firms in the Boston area—including Brightcove (NASDAQ: [[ticker:BCOV]]), TripAdvisor (NASDAQ: [[ticker:TRIP]]), Carbonite (NASDAQ: [[ticker:CARB]]), and Zipcar (NASDAQ: [[ticker:ZIP]]). (Two more Massachusetts firms are expected to go public this week: Exa, a simulation software company, and Tesaro, a cancer drug maker.) It is one of those non-consumer tech companies that tends to fly below the mainstream radar. But if you ever shop online at stores like Crocs, Kate Spade, Lands’ End, or Columbia Sportswear, you’ve probably seen the results of Demandware’s technology platform.

It has been a long road for the firm, which made its name helping businesses navigate the fast-moving channels of online commerce (think websites, but also mobile and social interfaces). Now, as a public company emerging from the recession, Demandware faces a new set of challenges, such as sustaining its growth, getting profitable, and remaining innovative—all while being subject to a greater level of scrutiny.

“Our IPO was one day in the life of our company,” says Rob Garf, Demandware’s vice president of product and solutions marketing. “We need to stay focused on the ultimate prize, which is our clients’ success, and growing our client base.” (The company’s technology powers some 400-plus digital sites.)

Garf, a veteran of the retail industry since the mid-‘90s, came to Demandware about a year ago from IBM, where he helped lead the tech giant’s global retail strategy. He seems to have a fresh perspective on where Demandware goes from here. As he puts it, the key is for the company to

Pages: Page 1, Page 2

Author: Gregory T. Huang

Greg is a veteran journalist who has covered a wide range of science, technology, and business. As former editor in chief, he overaw daily news, features, and events across Xconomy's national network. Before joining Xconomy, he was a features editor at New Scientist magazine, where he edited and wrote articles on physics, technology, and neuroscience. Previously he was senior writer at Technology Review, where he reported on emerging technologies, R&D, and advances in computing, robotics, and applied physics. His writing has also appeared in Wired, Nature, and The Atlantic Monthly’s website. He was named a New York Times professional fellow in 2003. Greg is the co-author of Guanxi (Simon & Schuster, 2006), about Microsoft in China and the global competition for talent and technology. Before becoming a journalist, he did research at MIT’s Artificial Intelligence Lab. He has published 20 papers in scientific journals and conferences and spoken on innovation at Adobe, Amazon, eBay, Google, HP, Microsoft, Yahoo, and other organizations. He has a Master’s and Ph.D. in electrical engineering and computer science from MIT, and a B.S. in electrical engineering from the University of Illinois, Urbana-Champaign.